Dividend Growth Fund PRDGX. Dividend Growth Fund Advisor Class TADGX. Dividend Growth Fund I Class PDGIX SEMIANNUAL REPORT

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1 SEMIANNUAL REPORT June 30, 2018 PRDGX T. ROWE PRICE Dividend Growth Fund TADGX Dividend Growth Fund Advisor Class PDGIX Dividend Growth Fund I Class The fund invests in stocks that are likely to raise their dividend payouts over time. For more insights from T. Rowe Price investment professionals, go to troweprice.com.

2 HIGHLIGHTS The Dividend Growth Fund returned 1.63% for the six-month reporting period, underperforming the S&P 500 Index and the Lipper Large-Cap Core Funds Index. Our selection of stocks in information technology, health care, utilities, and energy produced many of the portfolio s top absolute contributors, while our shares of industrials and business services, consumer staples, financials, and materials detracted. The fund s largest allocations were in the health care, financials, and information technology sectors accounting for roughly 50% of our assets. We remain confident that well-managed dividend growth companies are well positioned for this more uncertain environment. Go Paperless Sign up for e-delivery of your statements, confirmations, and prospectuses or shareholder reports. TO ENROLL: If you invest directly with T. Rowe Price, go to troweprice.com/paperless. If you invest through an investment advisor, a bank, or a brokerage firm, please contact that organization and ask if it can provide electronic documentation. It s fast receive your statements and confirmations faster than U.S. mail. It s convenient access your important account documents whenever you need them. It s secure we protect your online accounts using True Identity to confirm new accounts and make verification faster and more secure. It can save you money where applicable, T. Rowe Price passes on the cost savings to fund holders.* Log in to your account at troweprice.com for more information. * Certain mutual fund accounts that are assessed an annual account service fee can also save money by switching to e-delivery.

3 CIO Market Commentary Dear Shareholder U.S. stocks recorded decent gains in the first half of 2018, but unlike last year, investors had to absorb some bumps along the way. In February, volatility spiked and the S&P 500 Index briefly tumbled over 10% from its highs, putting it in correction territory. The major U.S. benchmarks recovered their losses in the spring, eventually bringing the technology-focused Nasdaq Composite Index and the smaller-cap indexes to new highs. Volatility stayed somewhat elevated, however, and many investors clearly remained anxious as the first half of your fund s fiscal year ended. Solid corporate and economic fundamentals initially seemed to promise that 2017 s strong stock market momentum might carry forward into Continued global synchronized growth led to strong profits for many multinationals. In the U.S., earnings for the S&P 500 rose by nearly 25% in the first quarter versus a year before, according to FactSet the best performance since the recovery from the financial crisis. Profit growth also picked up in Europe, Japan, and emerging markets, even as growth in many international economies cooled a bit. Inflation fears presented the first obstacle to the markets in February, however. Stocks tumbled on news that hourly wages had jumped in January, sparking fears that the Federal Reserve would pick up its pace of interest rate increases in order to head off inflation. Wage growth moderated in the following months, but a series of strong economic reports raised growth expectations and sent long-term interest rates to multiyear peaks by May. Investors also worried that the massive U.S. fiscal stimulus from December s tax cuts and March s spending bill might overheat the economy, though interest rates fell back in late May and June as Fed officials stressed their intention to move slowly in tightening monetary policy. Trade tensions soon emerged as a second impediment for the markets. The Trump administration began implementing a more populist trade stance in March, announcing tariffs on steel and aluminum imports, threatening to withdraw from the North American Free Trade Agreement (NAFTA), and later raising the possibility of taxing auto imports. The administration also announced a steady escalation in possible tariffs on Chinese goods, eventually targeting a list of $200 billion in Chinese imports. China and other U.S. trading partners vowed to retaliate proportionately. 1

4 Investors initially seemed willing to dismiss the tit-for-tat threats as negotiating tactics, but evidence eventually emerged that even the prospect of tariffs was impacting corporate strategies and profit outlooks. Stocks slumped on June 21, after German automaker Daimler lowered its earnings guidance due to possible tariff increases on SUVs it manufactures in the U.S. and sells in China. A few days later, Harley-Davidson revealed that it was planning to move some of its motorcycle production to Europe to avoid retaliatory tariffs recently announced by the European Union. Boeing, Caterpillar, and other leading exporters suffered declines as trade tensions worsened, but small-caps, which typically have far less international exposure, fared much better than large-caps in the first half of the year. Growth shares continued to outperform value shares despite the strong performance of energy stocks, which benefited from a rise in oil prices to multiyear highs. Stocks in overseas markets reacted particularly poorly to growing trade fears and fell for the period. A decline in many currencies relative to the dollar also weighed on international bond and stock returns for U.S. investors. Meanwhile, technology shares continued to dominate, with much of the market s overall gain to date in 2018 concentrated in a handful of mega-cap companies able to leverage dominant Internet platforms. Data breaches and concerns about the growing power of these firms resulted in calls for government intervention in early For now, however, the threat of increased regulation seems a longer-term one that appears minor in comparison to the powerful fundamental strength of these companies. T. Rowe Price s global team of industry experts is monitoring the possible impact of tariffs and other challenges on a wide range of companies from the global tech titans to small, domestic firms that get little analyst coverage on Wall Street. While the rest of 2018 may bring further surprises, you can rest assured that your portfolio manager is drawing on a wide range of insights in seeking to provide shareholders with superior returns while minimizing the impact of unforeseen political events or other pitfalls. Thank you for your continued confidence in T. Rowe Price. Sincerely, Robert Sharps Group Chief Investment Officer 2

5 Management s Discussion of Fund Performance INVESTMENT OBJECTIVE The fund seeks dividend income and long-term capital growth primarily through investments in stocks. FUND COMMENTARY How did the fund perform in the past six months? The Dividend Growth Fund returned 1.63% in the six months ended June 30, The fund underperformed its benchmark, the S&P 500 Index, which returned 2.65%. Returns for the Advisor and I Class shares reflect their different fee structures. (Past performance cannot guarantee future results.) The fund s Board of Directors declared a first-quarter dividend of $0.12 per share ($0.09 and $0.13 per share for the fund s Advisor and I Class shares, respectively) on March 26, 2018, and paid on March 28, The secondquarter dividend of $0.15 per share ($0.12 and $0.17 per share for the fund s Advisor and I Class shares, PERFORMANCE COMPARISON respectively) was declared on June 26, 2018, and paid on Six-Month Period Ended 6/30/18 Total Return June 28, Dividend Growth Fund 1.63% What factors influenced the Dividend Growth Fund Advisor Class 1.46 fund s performance? Dividend Growth Fund I Class 1.67 The fund underperformed S&P 500 Index 2.65 the S&P 500 because of our Lipper Large-Cap Core Funds Index 1.85 overall sector weightings especially our underweight to the information technology sector. On the plus side, our overall stock selection helped the fund s relative performance. However, our consumer discretionary holdings significantly underperformed their counterparts in the benchmark. This was partially due to not owning non-dividend-paying companies Amazon.com and Netflix, which were up around 50% and 100%, respectively, in the first half of the year. In absolute terms, stocks in the information technology, financials, and health care sectors were some of our top contributors. Consumer staples and discretionary stocks were major detractors. 3

6 Microsoft, our largest holding, and Visa were two of our top contributors in absolute terms. Microsoft shares benefited from strong quarterly earnings, continued growth in its cloud computing business, and encouraging earnings guidance for the remainder of Visa shares strengthened on the back of its electronic payments business and continued robust revenue growth. Managed care provider UnitedHealth Group, animal health pharmaceutical company Zoetis, and health care equipment supplier Becton, Dickinson & Company were top absolute contributors within health care. All three companies continued to generate above-average revenue, earnings, and cash flow growth. Utility companies Sempra Energy, Atmos Energy, and NextEra Energy also bolstered the fund s returns. These defensive stocks performed well following solid quarterly earnings results, beneficial cost management, and attractive longer-term growth prospects. (Please refer to the portfolio of investments for a complete list of holdings and the amount each represents in the portfolio.) Our detractors came from a variety of sectors. Philip Morris, an international seller of tobacco-based products, was our largest absolute detractor. The stock fell following surprisingly weak growth of iqos, the company s heat not burn e-cigarette device in Japan. Wells Fargo, one of our top 10 holdings, and insurer Chubb both performed poorly. Wells Fargo shares were hurt by regulatory penalties and operational missteps, while Chubb shares declined due to rising interest rates and a slowdown in profits from its underwriting business. Shares of diversified industrial company Illinois Tool Works sank following lower-than-expected quarterly operating profit and margins, and global tools maker Stanley Black & Decker shares pulled back on weakness in housing as well as uncertainty about new steel tariffs. How is the fund positioned? Our trading activity is focused on identifying stocks with the best prospects for long-term growth. Our emphasis is on durable and sustainable growth companies in which dividends remain an important component of total return. The fund s largest allocations were in the health care, financials, and information technology sectors accounting for roughly 50% of assets. Health care was an attractive sector providing several defensively positioned stocks of companies with strong fundamentals, while our financial stocks, especially within the insurance industry, helped the portfolio outperform the sector as a whole. Given that many information technology companies exhibit inherently volatile earnings streams and often require high levels of capital expenditures reinvestment, we remain underweight the sector. 4

7 SECTOR DIVERSIFICATION Percent of Net Assets 12/31/17 6/30/18 Health Care 17.2% 18.2% Financials Information Technology Industrials and Business Services Consumer Discretionary Consumer Staples Utilities Energy Materials Real Estate Telecommunication Services Other and Reserves Total 100.0% 100.0% Historical weightings reflect current industry/sector classifications. Our top five holdings, Microsoft, JPMorgan Chase, UnitedHealth Group, Visa, and Becton, Dickinson & Company, come from a variety of sectors. The information technology sector represented 14% of assets at the beginning of the period and grew to 16% by the end of the period. The fund initiated a position in semiconductor chipmaker AVGO partly on the belief that the company had a significant amount of cash to deploy for dividends. Paperbased consumer products company Kimberly-Clark was another company that we found attractive because of its historically dependable dividend, stock price, and potential for growth. Our portfolio additions included utility American Water Works, which serves the water and waste water market, and industrial stock Hubbell, which serves electrical and power markets. Utilities stocks offered good buying opportunities following the sector s broad sell-off earlier in the year on fears of higher interest rates. We believe long-term growth is on tap in the industry as the U.S. upgrades its aging infrastructure, and we are comfortable with our overweight in the sector. We eliminated some stocks to fund higher-conviction ideas. Multinational industrial Johnson Controls was eliminated after our confidence diminished about management s ability to implement key transformational changes. We exited out of L Brands, which sells popular retail brands Victoria s Secret and Bath & Body Works, as its turnaround plan progressed slower than expected and due to its lowered earnings guidance. We trimmed our position in Comcast partly due to its decision to enter the expensive sweepstakes to buy Twenty-First Century Fox. 5

8 What is portfolio management s outlook? The extended, but slow, recovery from the market bottom in 2009 continues. Most analysts expect 2018 earnings per share growth to exceed 20%, a portion of which is driven by lower corporate tax rates. The market s advance is not likely to keep pace, and the good news is that equities do not look as expensive as they did six months ago. Company fundamentals are currently healthy. However, there are some concerns on the horizon. There is a risk that U.S. trade negotiations between China and other countries could fail and turn into a trade dispute that could have a negative impact on the market. Another issue is market leadership. Typically, late in a cycle the market narrows, and growth shares outperform value shares. We certainly feel that today, with a handful of large-cap growth stocks driving a good portion of the market s return. For value to regain leadership, we typically need to see an acceleration in economic growth, which is not an easy expectation given the market s nine-year-long advance. We are cautious but optimistic that there are still sufficient drivers in place to remain constructive on equity markets. While we are entering a more uncertain phase of the equity cycle, we do not believe that a recession is on the horizon, but we take note that we are in an extended cycle. Our focus is to find companies that can manage through the current environment better than their peers. At the sector level, we are cautiously watching developments in financials given the flattening of the yield curve. We remain confident about the financial companies that we currently own and believe that dividends and shareholder returns should hold up well in the near term. Consumer staples is a notably difficult sector in which to find good defensive stocks to buy. Nonetheless, we remain confident that dividend growers in a variety of sectors are well positioned for an environment of higher interest rates and inflation. We are confident that our robust research platform and worldwide fundamentally driven investment process is well suited to seek the best investment opportunities. The views expressed reflect the opinions of T. Rowe Price as of the date of this report and are subject to change based on changes in market, economic, or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. 6

9 RISKS OF STOCK INVESTING A fund s share price can fall because of weakness in the stock or bond markets, a particular industry, or specific holdings. Stock markets can decline for many reasons, including adverse political or economic developments, changes in investor psychology, or heavy institutional selling. The prospects for an industry or company may deteriorate because of a variety of factors, including disappointing earnings or changes in the competitive environment. In addition, the investment manager s assessment of companies held in a fund may prove incorrect, resulting in losses or poor performance even in rising markets. Funds investing in stocks with a dividend orientation may have somewhat lower potential for price appreciation than those concentrating on rapidly growing firms. Also, a company may reduce or eliminate its dividend. 7

10 PORTFOLIO HIGHLIGHTS TWENTY-FIVE LARGEST HOLDINGS Percent of net Assets 6/30/18 Microsoft 3.7% JPMorgan Chase 3.0 UnitedHealth Group 3.0 Visa 2.7 Becton, Dickinson & Company 2.4 Apple 2.2 Danaher 2.1 Thermo Fisher Scientific 1.9 Pfizer 1.8 Wells Fargo 1.8 Accenture 1.7 Roper Technologies 1.6 ExxonMobil 1.6 U.S. Bancorp 1.5 Marsh & McLennan 1.5 Bank of New York Mellon 1.4 PepsiCo 1.4 Honeywell International 1.4 Texas Instruments 1.4 Occidental Petroleum 1.3 Stryker 1.3 Fidelity National Information 1.3 Chubb 1.3 Dollar General 1.3 Home Depot 1.2 Total 45.8% Note: The information shown does not reflect any exchange-traded funds (ETFs), cash reserves, or collateral for securities lending that may be held in the portfolio. 8

11 GROWTH OF $10,000 This chart shows the value of a hypothetical $10,000 investment in the fund over the past 10 fiscal year periods or since inception (for funds lacking 10-year records). The result is compared with benchmarks, which include a broad-based market index and may also include a peer group average or index. Market indexes do not include expenses, which are deducted from fund returns as well as mutual fund averages and indexes. DIVIDEND GROWTH FUND $35,000 30,000 25,000 20,000 15,000 10,000 6/08 6/09 6/10 6/11 6/12 6/13 6/14 6/15 6/16 6/17 6/18 As of 6/30/18 Dividend Growth Fund S&P 500 Index Lipper Large-Cap Core Funds Index $25,370 26,340 23,715 Note: Performance for the Advisor and I Class shares will vary due to their differing fee structures. See returns table on the next page. 9

12 AVERAGE ANNUAL COMPOUND TOTAL RETURN Since Inception Periods Ended 6/30/18 1 Year 5 Years 10 Years Inception Date Dividend Growth Fund 10.82% 12.31% 9.76% Dividend Growth Fund Advisor Class Dividend Growth Fund I Class % 12/17/15 The fund s performance information represents only past performance and is not necessarily an indication of future results. Current performance may be lower or higher than the performance data cited. Share price, principal value, and return will vary, and you may have a gain or loss when you sell your shares. For the most recent month-end performance, please visit our website (troweprice.com) or contact a T. Rowe Price representative at or, for Advisor and I Class shares, This table shows how the fund would have performed each year if its actual (or cumulative) returns for the periods shown had been earned at a constant rate. Average annual total return figures include changes in principal value, reinvested dividends, and capital gain distributions. Returns do not reflect taxes that the shareholder may pay on fund distributions or the redemption of fund shares. When assessing performance, investors should consider both short- and long-term returns. EXPENSE RATIO Dividend Growth Fund 0.64% Dividend Growth Fund Advisor Class 0.91 Dividend Growth Fund I Class 0.51 The expense ratio shown is as of the fund s fiscal year ended 12/31/17. This number may vary from the expense ratio shown elsewhere in this report because it is based on a different time period and, if applicable, includes acquired fund fees and expenses but does not include fee or expense waivers. 10

13 FUND EXPENSE EXAMPLE As a mutual fund shareholder, you may incur two types of costs: (1) transaction costs, such as redemption fees or sales loads, and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other fund expenses. The following example is intended to help you understand your ongoing costs (in dollars) of investing in the fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the most recent six-month period and held for the entire period. Please note that the fund has three share classes: The original share class (Investor Class) charges no distribution and service (12b-1) fee, the Advisor Class shares are offered only through unaffiliated brokers and other financial intermediaries and charge a 0.25% 12b-1 fee, and I Class shares are available to institutionally oriented clients and impose no 12b-1 or administrative fee payment. Each share class is presented separately in the table. Actual Expenses The first line of the following table (Actual) provides information about actual account values and expenses based on the fund s actual returns. You may use the information on this line, together with your account balance, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number on the first line under the heading Expenses Paid During Period to estimate the expenses you paid on your account during this period. Hypothetical Example for Comparison Purposes The information on the second line of the table (Hypothetical) is based on hypothetical account values and expenses derived from the fund s actual expense ratio and an assumed 5% per year rate of return before expenses (not the fund s actual return). You may compare the ongoing costs of investing in the fund with other funds by contrasting this 5% hypothetical example and the 5% hypothetical examples that appear in the shareholder reports of the other funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Note: T. Rowe Price charges an annual account service fee of $20, generally for accounts with less than $10,000. The fee is waived for any investor whose T. Rowe Price mutual fund accounts total $50,000 or more; accounts electing to receive electronic delivery of account statements, transaction confirmations, prospectuses, and shareholder reports; or accounts of an investor who is a T. Rowe Price Personal Services or Enhanced Personal Services client (enrollment in these programs generally requires T. Rowe Price assets of at least $250,000). This fee is not included in the accompanying table. If you are subject to the fee, keep it in mind when you are estimating the ongoing expenses of investing in the fund and when comparing the expenses of this fund with other funds. You should also be aware that the expenses shown in the table highlight only your ongoing costs and do not reflect any transaction costs, such as redemption fees or sales loads. Therefore, the second line of the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. To the extent a fund charges transaction costs, however, the total cost of owning that fund is higher. 11

14 FUND EXPENSE EXAMPLE (CONTINUED) DIVIDEND GROWTH FUND Beginning ending Expenses Paid Account Value Account Value During Period* 1/1/18 6/30/18 1/1/18 to 6/30/18 Investor Class Actual $1, $1, $3.20 Hypothetical (assumes 5% return before expenses) 1, , Advisor Class Actual 1, , Hypothetical (assumes 5% return before expenses) 1, , I Class Actual 1, , Hypothetical (assumes 5% return before expenses) 1, , *Expenses are equal to the fund s annualized expense ratio for the 6-month period, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (181), and divided by the days in the year (365) to reflect the half-year period. The annualized expense ratio of the Investor Class was 0.64%, the Advisor Class was 0.91%, and the I Class was 0.51%. 12

15 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period Investor Class 6 Months Ended 6/30/18 Year Ended 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 NET ASSET VALUE Beginning of period $ $ $ $ $ $ Investment activities Net investment income (1) Net realized and unrealized gain/loss Total from investment activities Distributions Net investment income (0.27) (0.53) (0.57) (0.61) (0.47) (0.41) Net realized gain (0.42) (0.57) (1.99) (1.16) (0.22) Total distributions (0.27) (0.95) (1.14) (2.60) (1.63) (0.63) NET ASSET VALUE End of period $ $ $ $ $ $

16 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period 6 Months Ended 6/30/18 Ratios/Supplemental Data Year Ended 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 Total return (2) 1.63% 19.32% 11.62% 2.36% 12.34% 30.35% Ratio of total expenses to average net assets 0.64% (3) 0.64% 0.64% 0.64% 0.65% 0.66% Ratio of net investment income to average net assets 1.31% (3) 1.29% 1.68% 1.70% 1.33% 1.37% Portfolio turnover rate 9.9% 15.5% 11.3% 24.6% 18.6% 12.7% Net assets, end of period (in millions) $ 6,185 $ 6,249 $ 5,349 $ 4,437 $ 4,360 $ 3,823 (1) (2) (3) Per share amounts calculated using average shares outstanding method. Total return reflects the rate that an investor would have earned on an investment in the fund during each period, assuming reinvestment of all distributions. Total return is not annualized for periods less than one year. Annualized The accompanying notes are an integral part of these financial statements. 14

17 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period Advisor Class 6 Months Ended 6/30/18 Year Ended 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 NET ASSET VALUE Beginning of period $ $ $ $ $ $ Investment activities Net investment income (1) Net realized and unrealized gain/loss Total from investment activities Distributions Net investment income (0.21) (0.41) (0.49) (0.51) (0.37) (0.33) Net realized gain (0.42) (0.57) (1.99) (1.16) (0.22) Total distributions (0.21) (0.83) (1.06) (2.50) (1.53) (0.55) NET ASSET VALUE End of period $ $ $ $ $ $

18 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period 6 Months Ended 6/30/18 Ratios/Supplemental Data Year Ended 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 Total return (2) 1.46% 19.03% 11.33% 2.08% 12.07% 29.96% Ratio of total expenses to average net assets 0.91% (3) 0.91% 0.91% 0.91% 0.91% 0.93% Ratio of net investment income to average net assets 1.03% (3) 1.01% 1.45% 1.43% 1.06% 1.10% Portfolio turnover rate 9.9% 15.5% 11.3% 24.6% 18.6% 12.7% Net assets, end of period (in thousands) $ 323,676 $ 366,012 $ 350,863 $ 229,291 $ 258,253 $ 252,974 (1) (2) (3) Per share amounts calculated using average shares outstanding method. Total return reflects the rate that an investor would have earned on an investment in the fund during each period, assuming reinvestment of all distributions. Total return is not annualized for periods less than one year. Annualized The accompanying notes are an integral part of these financial statements. 16

19 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period I Class 6 Months Ended 6/30/18 Year Ended 12/31/17 12/31/16 12/17/15 (1) Through 12/31/15 NET ASSET VALUE Beginning of period $ $ $ $ Investment activities Net investment income (2) (3) Net realized and unrealized gain/loss Total from investment activities Distributions Net investment income (0.30) (0.58) (0.62) Net realized gain (0.42) (0.57) Total distributions (0.30) (1.00) (1.19) NET ASSET VALUE End of period $ $ $ $

20 Unaudited FINANCIAL HIGHLIGHTS For a share outstanding throughout each period Ratios/Supplemental Data 6 Months Ended 6/30/18 Year Ended 12/31/17 12/31/16 12/17/15 (1) Through 12/31/15 Total return (4) 1.67% 19.47% 11.74% 0.29% (3) Ratio of total expenses to average net assets 0.51% (5) 0.51% 0.51% 0.54% (3)(5) Ratio of net investment income to average net assets 1.45% (5) 1.43% 2.12% 1.29% (3)(5) Portfolio turnover rate 9.9% 15.5% 11.3% 24.6% Net assets, end of period (in millions) $ 2,255 $ 2,187 $ 1,235 $ 251 (6) (1) (2) (3) (4) (5) (6) Inception date Per share amounts calculated using average shares outstanding method. See Note 5. Excludes expenses in excess of a 0.05% contractual operating expense limitation in effect through 4/30/20. Total return reflects the rate that an investor would have earned on an investment in the fund during each period, assuming reinvestment of all distributions. Total return is not annualized for periods less than one year. Annualized Amount shown is in thousands. The accompanying notes are an integral part of these financial statements. 18

21 June 30, 2018 (Unaudited) PORTFOLIO OF INVESTMENTS Shares $ Value (Cost and value in $000s) COMMON STOCKS 97.8% CONSUMER DISCRETIONARY 10.5% Hotels, Restaurants & Leisure 3.2% Carnival (1) 482,800 27,669 Hilton Worldwide Holdings 668,862 52,947 Marriott, Class A 567,491 71,844 McDonald's 229,300 35,929 MGM Resorts International 1,312,600 38,105 Yum! Brands 717,000 56, ,578 Media 3.0% Comcast, Class A 2,756,500 90,441 Omnicom Group (1) 527,400 40,225 Twenty-First Century Fox, Class A (1) 1,389,500 69,044 Walt Disney 637,300 66, ,505 Multiline Retail 1.3% Dollar General 1,127, , ,152 Specialty Retail 2.5% Home Depot 550, ,305 Ross Stores 921,200 78,072 Tractor Supply 395,300 30, ,613 Textiles, Apparel & Luxury Goods 0.5% Nike, Class B (1) 507,600 40,446 40,446 Total Consumer Discretionary 916,294 19

22 (Cost and value in $000s) CONSUMER STAPLES 7.9% Shares $ Value Beverages 3.5% Coca-Cola (1) 889,800 39,026 Diageo (GBP) 1,198,406 43,054 Dr Pepper Snapple Group 844, ,981 PepsiCo (1) 1,119, , ,941 Food & Staples Retailing 0.4% Costco Wholesale 159,400 33,311 33,311 Food Products 2.6% McCormick (1) 343,500 39,877 Mondelez International, Class A (1) 2,203,751 90,354 Nestle (CHF) 598,986 46,422 Tyson Foods, Class A 771,900 53, ,798 Household Products 0.6% Colgate-Palmolive (1) 295,619 19,159 Kimberly-Clark 316,200 33,309 52,468 Tobacco 0.8% Philip Morris International 897,545 72,468 72,468 Total Consumer Staples 694,986 ENERGY 4.7% Energy Equipment & Services 0.3% Schlumberger (1) 382,500 25,639 25,639 Oil, Gas & Consumable Fuels 4.4% Canadian Natural Resources (CAD) 1,268,000 45,737 Exxon Mobil 1,679, ,953 Occidental Petroleum 1,368, ,533 20

23 (Cost and value in $000s) Shares $ Value TransCanada (CAD) 2,079,300 89, ,049 Total Energy 414,688 FINANCIALS 17.3% Banks 6.9% First Republic Bank 513,259 49,678 JPMorgan Chase 2,550, ,794 U.S. Bancorp 2,615, ,822 Wells Fargo 2,808, , ,981 Capital Markets 4.2% Bank of New York Mellon 2,312, ,735 Morgan Stanley 433,000 20,524 S&P Global 202,900 41,369 State Street 1,055,200 98,229 TD Ameritrade Holding 1,480,615 81, ,950 Consumer Finance 0.4% American Express 395,900 38,798 38,798 Insurance 5.8% American International Group 1,113,500 59,038 Aon (1) 583,800 80,080 Chubb 898, ,083 Marsh & McLennan 1,554, ,431 Progressive 1,145,600 67,762 Willis Towers Watson 399,000 60, ,882 Total Financials 1,515,611 HEALTH CARE 18.2% Health Care Equipment & Supplies 6.8% Becton Dickinson & Company 861, ,390 21

24 (Cost and value in $000s) Shares $ Value Danaher 1,855, ,111 Medtronic 1,130,678 96,797 Stryker 677, , ,701 Health Care Providers & Services 4.1% Cigna 263,350 44,756 CVS Health 790,188 50,849 UnitedHealth Group 1,061, , ,911 Life Sciences Tools & Services 2.9% Agilent Technologies 1,355,500 83,824 Thermo Fisher Scientific 814, , ,515 Pharmaceuticals 4.4% Johnson & Johnson 768,800 93,286 Merck 832,900 50,557 Pfizer 4,423, ,466 Zoetis 991,900 84, ,809 Total Health Care 1,597,936 INDUSTRIALS & BUSINESS SERVICES 11.0% Aerospace & Defense 1.2% Boeing 28,900 9,696 Northrop Grumman 149,100 45,878 United Technologies 392,200 49, ,611 Air Freight & Logistics 0.6% C.H. Robinson Worldwide (1) 399,100 33,389 UPS, Class B 187,000 19,865 53,254 Airlines 0.3% Alaska Air Group 427,600 25,823 25,823 22

25 (Cost and value in $000s) Shares $ Value Commercial Services & Supplies 1.0% Waste Connections (CAD) 1,192,763 89,791 89,791 Electrical Equipment 0.4% Hubbell (1) 362,800 38,362 38,362 Industrial Conglomerates 3.0% Honeywell International 842, ,420 Roper Technologies 506, , ,113 Machinery 3.0% Fortive 965,000 74,411 Illinois Tool Works (1) 649,500 89,982 PACCAR (1) 230,400 14,276 Stanley Black & Decker 611,200 81, ,842 Professional Services 0.6% Equifax (1) 441,025 55,177 55,177 Road & Rail 0.9% Union Pacific 530,475 75,158 75,158 Total Industrials & Business Services 963,131 INFORMATION TECHNOLOGY 16.2% Communications Equipment 0.8% Cisco Systems 1,621,800 69,786 69,786 Electronic Equipment, Instruments & Components 0.8% TE Connectivity 800,500 72,093 72,093 IT Services 6.4% Accenture, Class A (1) 894, ,315 23

26 (Cost and value in $000s) Shares $ Value Automatic Data Processing 476,800 63,958 Fidelity National Information Services 1,077, ,237 Visa, Class A 1,812, , ,562 Semiconductors & Semiconductor Equipment 2.3% Broadcom 107,200 26,011 Microchip Technology (1) 578,700 52,633 Texas Instruments 1,078, ,882 Xilinx 60,300 3, ,461 Software 3.7% Microsoft 3,249, , ,423 Technology Hardware, Storage & Peripherals 2.2% Apple 1,024, , ,590 Total Information Technology 1,417,915 MATERIALS 4.0% Chemicals 3.0% Air Products & Chemicals 567,100 88,314 Ecolab (1) 101,000 14,173 PPG Industries (1) 172,100 17,852 Praxair (1) 209,200 33,085 RPM International (1) 1,301,400 75,898 Sherwin-Williams 80,000 32, ,928 Containers & Packaging 1.0% Ball (1) 2,425,400 86,223 86,223 Total Materials 348,151 24

27 (Cost and value in $000s) REAL ESTATE 2.7% Shares $ Value Equity Real Estate Investment Trusts 2.7% American Tower, REIT 680,800 98,151 Crown Castle International, REIT 963, ,879 Equity Residential, REIT (1) 494,038 31,465 Total Real Estate 233,495 TELECOMMUNICATION SERVICES 0.2% Diversified Telecommunication Services 0.2% AT&T 578,487 18,575 Total Telecommunication Services 18,575 UTILITIES 5.1% Electric Utilities 1.7% NextEra Energy 620, ,609 Southern Company 980,900 45, ,034 Gas Utilities 1.2% Atmos Energy (1) 1,171, , ,587 Multi-Utilities 1.6% DTE Energy (1) 725,720 75,206 Sempra Energy (1) 572,388 66, ,666 Water Utilities 0.6% American Water Works (1) 641,800 54,797 54,797 Total Utilities 451,084 Total Common Stocks (Cost $5,543,120) 8,571,866 SHORT-TERM INVESTMENTS 1.9% Money Market Funds 1.9% T. Rowe Price Government Reserve Fund, 1.91% (2)(3) 171,044, ,045 Total Short-Term Investments (Cost $171,045) 171,045 25

28 (Cost and value in $000s) Shares $ Value SECURITIES LENDING COLLATERAL 2.4% Investments in a Pooled Account through Securities Lending Program with State Street Bank and Trust Company 2.4% Money Market Funds 2.4% T. Rowe Price Short-Term Fund, 2.08% (2)(3) 20,878, ,789 Total Investments through Securities Lending Program with State Street Bank and Trust Company 208,789 Total Securities Lending Collateral (Cost $208,789) 208,789 Total Investments in Securities 102.1% of Net Assets (Cost $5,922,954) $ 8,951,700 Shares are denominated in U.S. dollars unless otherwise noted. (1) All or a portion of this security is on loan at June 30, total value of such securities at period-end amounts to $204,700. See Note 3. (2) Affiliated Company (3) Seven-day yield CAD Canadian Dollar CHF Swiss Franc GBP British Pound REIT A domestic Real Estate Investment Trust whose distributions pass-through with original tax character to the shareholder 26

29 AFFILIATED COMPANIES ($000s) The fund may invest in certain securities that are considered affiliated companies. As defined by the 1940 Act, an affiliated company is one in which the fund owns 5% or more of the outstanding voting securities, or a company that is under common ownership or control. The following securities were considered affiliated companies for all or some portion of the six months ended June 30, Net realized gain (loss), investment income, change in net unrealized gain/loss, and purchase and sales cost reflect all activity for the period then ended. Affiliate Net Realized Gain (Loss) Change in Net Unrealized Gain/Loss Investment Income T. Rowe Price Short-Term Fund $ $ $ ++ T. Rowe Price Government Reserve Fund 2,107 Totals $ # $ $ 2,107+ Supplementary Investment Schedule Value Affiliate 12/31/17 Purchase Cost Sales Cost Value 6/30/18 T. Rowe Price Short-Term Fund $ 216,936 $ 208,789 T. Rowe Price Government Reserve Fund 430, ,045 $ 379,834^ # Capital gain distributions from mutual funds represented $0 of the net realized gain. ++ Excludes earnings on securities lending collateral, which are subject to rebates and fees such as described in Note 3. + Investment income comprised $2,107 of dividend income and $0 of interest income. Purchase and sale information not shown for cash management funds. ^ The cost basis of investments in affiliated companies was $379,834. The accompanying notes are an integral part of these financial statements. 27

30 June 30, 2018 (Unaudited) STATEMENT OF ASSETS AND LIABILITIES ($000s, except shares and per share amounts) Assets Investments in securities, at value (cost $5,922,954) $ 8,951,700 Receivable for shares sold 17,530 Dividends receivable 11,538 Receivable for investment securities sold 4,335 Other assets 957 Total assets 8,986,060 Liabilities Obligation to return securities lending collateral 206,444 Payable for shares redeemed 6,808 Investment management fees payable 3,575 Payable for investment securities purchased 2,088 Due to affiliates 175 Payable to directors 7 Other liabilities 3,109 Total liabilities 222,206 N E T A S S E T S $ 8, 7 6 3,

31 June 30, 2018 (Unaudited) STATEMENT OF ASSETS AND LIABILITIES ($000s, except shares and per share amounts) Net Assets Consist of: Undistributed net investment income $ 4,842 Accumulated undistributed net realized gain 133,979 Net unrealized gain 3,028,742 Paid-in capital applicable to 200,074,044 shares of $ par value capital stock outstanding; 1,000,000,000 shares authorized 5,596,291 N E T A S S E T S $ 8, 7 6 3, NET ASSET VALUE PER SHARE Investor Class ($6,184,962,227 / 141,182,151 shares outstanding) $ Advisor Class ($323,676,389 / 7,396,357 shares outstanding) $ I Class ($2,255,215,576 / 51,495,536 shares outstanding) $ The accompanying notes are an integral part of these financial statements. 29

32 Unaudited STATEMENT OF OPERATIONS ($000s) 6 Months Ended 6/30/18 Investment Income (Loss) Income Dividend $ 87,020 Securities lending 224 Total income 87,244 Expenses Investment management 21,743 Shareholder servicing Investor Class $ 4,273 Advisor Class 279 I Class 10 4,562 Rule 12b-1 fees Advisor Class 435 Prospectus and shareholder reports Investor Class 183 Advisor Class 8 I Class Custody and accounting 164 Registration 181 Legal and audit 15 Directors 17 Proxy and annual meeting 186 Miscellaneous 13 Total expenses 27,582 Net investment income 59,662 30

33 Unaudited STATEMENT OF OPERATIONS ($000s) 6 Months Ended 6/30/18 Realized and Unrealized Gain / Loss Net realized gain (loss) Securities 131,449 Foreign currency transactions 87 Net realized gain 131,536 Change in net unrealized gain / loss Securities (47,890) Other assets and liabilities denominated in foreign currencies (20) Change in net unrealized gain / loss (47,910) Net realized and unrealized gain / loss 83,626 INCREASE IN NET ASSETS FROM OPERATIONS $ 143,288 The accompanying notes are an integral part of these financial statements. 31

34 Unaudited STATEMENT OF CHANGES IN NET ASSETS ($000s) 6 Months Ended 6/30/18 Year Ended 12/31/17 Increase (Decrease) in Net Assets Operations Net investment income $ 59,662 $ 103,206 Net realized gain 131, ,987 Change in net unrealized gain / loss (47,910) 1,181,359 Increase in net assets from operations 143,288 1,392,552 Distributions to shareholders Net investment income Investor Class (38,255) (76,492) Advisor Class (1,618) (3,612) I Class (15,824) (24,916) Net realized gain Investor Class (60,527) Advisor Class (3,517) I Class (20,051) Decrease in net assets from distributions (55,697) (189,115) Capital share transactions* Shares sold Investor Class 609,936 1,606,014 Advisor Class 33,734 92,110 I Class 508, ,058 Distributions reinvested Investor Class 33, ,657 Advisor Class 1,617 7,125 I Class 14,998 44,061 Shares redeemed Investor Class (769,117) (1,724,884) Advisor Class (81,127) (139,985) I Class (478,747) (319,417) Increase (decrease) in net assets from capital share transactions (126,252) 663,739 32

35 Unaudited STATEMENT OF CHANGES IN NET ASSETS ($000s) 6 Months Ended 6/30/18 Year Ended 12/31/17 Net Assets Increase (decrease) during period (38,661) 1,867,176 Beginning of period 8,802,515 6,935,339 E n d o f p e r i o d $ 8, 7 6 3, $ 8, 8 0 2, Undistributed net investment income 4, *Share information Shares sold Investor Class 13,893 40,021 Advisor Class 770 2,306 I Class 11,621 24,033 Distributions reinvested Investor Class 784 2,933 Advisor Class I Class 349 1,043 Shares redeemed Investor Class (17,540) (42,789) Advisor Class (1,857) (3,478) I Class (10,901) (7,879) Increase (decrease) in shares outstanding (2,843) 16,359 The accompanying notes are an integral part of these financial statements. 33

36 Unaudited NOTES TO FINANCIAL STATEMENTS T. Rowe Price Dividend Growth Fund, Inc. (the fund) is registered under the Investment Company Act of 1940 (the 1940 Act) as a diversified, open-end management investment company. The fund seeks dividend income and long-term capital growth primarily through investments in stocks. The fund has three classes of shares: the Dividend Growth Fund (Investor Class), the Dividend Growth Fund Advisor Class (Advisor Class), and the Dividend Growth Fund I Class (I Class). Advisor Class shares are sold only through unaffiliated brokers and other unaffiliated financial intermediaries. I Class shares generally are available only to investors meeting a $1,000,000 minimum investment or certain other criteria. The Advisor Class operates under a Board-approved Rule 12b-1 plan pursuant to which the class compensates financial intermediaries for distribution, shareholder servicing, and/or certain administrative services; the Investor and I Classes do not pay Rule 12b-1 fees. Each class has exclusive voting rights on matters related solely to that class; separate voting rights on matters that relate to all classes; and, in all other respects, the same rights and obligations as the other classes. NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation The fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 (ASC 946). The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP), including, but not limited to, ASC 946. GAAP requires the use of estimates made by management. Management believes that estimates and valuations are appropriate; however, actual results may differ from those estimates, and the valuations reflected in the accompanying financial statements may differ from the value ultimately realized upon sale or maturity. Investment Transactions, Investment Income, and Distributions Investment transactions are accounted for on the trade date basis. Income and expenses are recorded on the accrual basis. Realized gains and losses are reported on the identified cost basis. Dividends received from mutual fund investments are reflected as dividend income; capital gain distributions are reflected as realized gain/loss. Dividend income and capital gain distributions are recorded on the ex-dividend date. Income tax-related interest and penalties, if incurred, are recorded as income tax expense. Distributions from REITs are initially recorded as dividend income and, to the extent such represent a return of capital or capital gain for tax purposes, are reclassified when such information becomes available. Income distributions, if any, are declared and paid by each class quarterly. Distributions to shareholders are recorded on the ex-dividend date. A capital gain distribution may also be declared and paid by the fund annually. 34

37 Currency Translation Assets, including investments, and liabilities denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate, using the mean of the bid and asked prices of such currencies against U.S. dollars as quoted by a major bank. Purchases and sales of securities, income, and expenses are translated into U.S. dollars at the prevailing exchange rate on the respective date of such transaction. The portion of the results of operations attributable to changes in foreign exchange rates on investments is not bifurcated from the portion attributable to changes in market prices. The effect of changes in foreign currency exchange rates on realized and unrealized security gains and losses is reflected as a component of security gains and losses. Class Accounting Shareholder servicing, prospectus, and shareholder report expenses incurred by each class are charged directly to the class to which they relate. Expenses common to all classes, investment income, and realized and unrealized gains and losses are allocated to the classes based upon the relative daily net assets of each class. To the extent any expenses are waived or reimbursed in accordance with an expense limitation (see Note 5), the waiver or reimbursement is charged to the applicable class or allocated across the classes in the same manner as the related expense. The Advisor Class pays Rule 12b-1 fees, in an amount not exceeding 0.25% of the class s average daily net assets New Accounting Guidance In March 2017, the FASB issued amended guidance to shorten the amortization period for certain callable debt securities held at a premium. The guidance is effective for fiscal years and interim periods beginning after December 15, Adoption will have no effect on the fund s net assets or results of operations. Indemnification In the normal course of business, the fund may provide indemnification in connection with its officers and directors, service providers, and/or private company investments. The fund s maximum exposure under these arrangements is unknown; however, the risk of material loss is currently considered to be remote. NOTE 2 - VALUATION The fund s financial instruments are valued and each class's net asset value (NAV) per share is computed at the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day the NYSE is open for business. However, the NAV per share may be calculated at a time other than the normal close of the NYSE if trading on the NYSE is restricted, if the NYSE closes earlier, or as may be permitted by the SEC. Fair Value The fund s financial instruments are reported at fair value, which GAAP defines as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The T. Rowe Price Valuation Committee (the Valuation Committee) is an internal committee 35

38 that has been delegated certain responsibilities by the fund s Board of Directors (the Board) to ensure that financial instruments are appropriately priced at fair value in accordance with GAAP and the 1940 Act. Subject to oversight by the Board, the Valuation Committee develops and oversees pricing-related policies and procedures and approves all fair value determinations. Specifically, the Valuation Committee establishes procedures to value securities; determines pricing techniques, sources, and persons eligible to effect fair value pricing actions; oversees the selection, services, and performance of pricing vendors; oversees valuation-related business continuity practices; and provides guidance on internal controls and valuation-related matters. The Valuation Committee reports to the Board and has representation from legal, portfolio management and trading, operations, risk management, and the fund s treasurer. Various valuation techniques and inputs are used to determine the fair value of financial instruments. GAAP establishes the following fair value hierarchy that categorizes the inputs used to measure fair value: Level 1 - quoted prices (unadjusted) in active markets for identical financial instruments that the fund can access at the reporting date Level 2 - inputs other than Level 1 quoted prices that are observable, either directly or indirectly (including, but not limited to, quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in inactive markets, interest rates and yield curves, implied volatilities, and credit spreads) Level 3 - unobservable inputs Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect the assumptions that market participants would use to price the financial instrument. Unobservable inputs are those for which market data are not available and are developed using the best information available about the assumptions that market participants would use to price the financial instrument. GAAP requires valuation techniques to maximize the use of relevant observable inputs and minimize the use of unobservable inputs. When multiple inputs are used to derive fair value, the financial instrument is assigned to the level within the fair value hierarchy based on the lowest-level input that is significant to the fair value of the financial instrument. Input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level but rather the degree of judgment used in determining those values. Valuation Techniques Equity securities listed or regularly traded on a securities exchange or in the over-the-counter (OTC) market are valued at the last quoted sale price or, for certain markets, the official closing price at the time the valuations are made. OTC Bulletin 36